Oh, was the end of China’s COVID lockdowns an official explanation for the decline in revenue? I completely missed that. It would certainly explain things to some extent.
Not official, but it would explain why the COVID hangover only hit now and not a year ago, when most of the rest of the world lifted restrictions. After all, Asia is Flexion’s largest market.
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Yeah, the Asian share was already known 
I don’t know China’s share of this Asian portion, but it’s likely quite significant.
I must admit I bought into this a bit too hastily, and the share price has dropped significantly, but I’m still holding. It’s somehow really difficult to estimate what the “fair” value for a company like this is. Legislation is still apparently heading in a direction that Flexion could benefit from, so I’ve decided to hang on until the beginning of next year and then see if things are moving in the right direction or what. Obviously, I’d like to hear news about new games etc. before then. And if things are moving in a better direction, you’d think more of those would start coming through at some point 
But at least with Monopoly already in distribution, you’d think it’s printing money quite nicely now, given that it’s a gold mine on other platforms. But I guess that alone isn’t enough to sustain it, and obviously, they’ll need plenty more games in the future. Well, just some reflections for today. Looking forward to Q3!
The current EV is ridiculously low relative to cash flow or EBITDA. It feels like the “beginning of the end” is being priced in, even though the company is only just getting started. I suspect the curse of this stock is that the company is small, British, and reports in GBP, but is listed in Stockholm. Visibility in Sweden is likely very low. Furthermore, it takes a bit of effort to extract relevant key figures from the reporting currency and the share price.
Of course, I would also like to see announcements regarding new games and partnership agreements more frequently. However, in my opinion, the company is still at some level in the proof-of-concept phase. Game companies initially test the service with individual games, and if it works, the contract is expanded by adding more games or including larger titles. Scopely is an example of this.
And as you mentioned, while waiting for new announcements, we can enjoy the cash flows generated by Monopoly Go.
Edit: I, for one, have been happy to add more to my position.
I’ve also been considering buying more, but I haven’t added yet. The cash flow hasn’t even been positive yet, so I’m wondering a bit what it’ll take to turn it positive. But Monopoly Go plus those other games might be enough for that. If the cash flow turns positive and we get a few more games, then this will start to look like a pretty cheap stock. But we’ll see.
True, it hasn’t been positive yet, but if you strip out the working capital fluctuation from the H1/2023 figures (which I don’t think is essential) and acquisitions, FCF for H1 would be £1.1m. This isn’t much, of course, but earnings and cash flows are weighted towards H2, consistent with the Q1 comments. On the other hand, distribution rights haven’t been factored in there—and there might be more of those in the future.
Another metric to perhaps monitor alongside FCF would be [EBITDA - replacement investments - capitalized development costs - amortization of distribution rights]. In H1, this was down to 1.26 - 0.03 - 0.12 - 0.7 = £0.41m.
But I was mainly referring to future cash flow. If H2 turns out to be a flop, then disbelief will start to set in for this one.
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And there it is, a profit warning, and the full-year growth forecast was cut from 20-40% → 0-10%. The underlying reasons are actually quite promising, though (large negotiations ongoing, but they’ve dragged on longer than expected), and Q4 is looking to be strong.
A bit of a conflicted feeling about that, but on the other hand, I’d rather have a weak quarterly report and a good outlook than the other way around.
Our recovery started in September and was driven by the successful launches of our new titles together with significantly stronger distribution in some of our main stores and the newly launched Xiaomi GetApps store. This was further seen in October which was the strongest month in Flexion’s history with 26% revenue growth (YoY) in distribution measured in constant currencies. Financially, Flexion is also very strong with a long term positive operating cashflow and a cash balance of GBP 8m as per September 2023.
Since the launch of Monopoly Go and Stumble Guys in our channels in Q3, we have moved up a gear and are seeing stronger interest from the top-grossing game developers around the world. It sets us up for a solid Q4 2023 and a game changing 2024 - the year that the European Digital Markets Act will help drive further growth in alternative distribution, concludes Jens Lauritzson”
An explosive 2024 is coming. That promise simply must be delivered on.
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Yeah, a profit warning dropped. In a way, it was expected that those two newest games would only start boosting revenue now, and since they were apparently only launched on the platform in September, they’re only just starting to show in the figures. But like we discussed, new games are still needed, and apparently big discussions are being held regarding those if the talk is to be believed. Honestly, it’s because of that revolutionary next year that I’m hanging on, so they’d better start performing then 
But at the level of talk, things are still under control. I guess there’s nothing for it but to wait again.
A new small-scale contract:
LONDON, 10th November 2023 - Flexion (Nasdaq: FLEXM), the games marketing company has signed an agreement with Special Gamez, the mobile gaming publishing division of iQIYI, an innovative market-leading online entertainment service in China, to publish the developer’s worldwide hit game Wolf Game: Wild Animal Wars on the alternative app stores. Flexion will distribute the game on the Amazon Appstore, Aptoide, ONE store, Samsung Galaxy Store, DT Hub, Huawei’s AppGallery and Xiaomi GetApps in Q4 2023.
Wolf Game: Wild Animal Wars earns over $2M in net revenue combined on Google Play and Apple’s App Store. Flexion’s distribution services will add revenue and new players from the alternative app stores through monetisation, platform relations and new user acquisition. For Special Gamez, the partnership with Flexion represents an opportunity to improve its brand and product recognition while reaching new users outside its existing distribution channels.
“Smart developers like Special Gamez are driving increased revenue and wider audiences thanks to the alternative app stores,” says Jens Lauritzson, CEO of Flexion. “Flexion is adding an average of 10% to a game’s Google Play revenue by taking it to the alternative app stores. We have more than 100 people with expertise and experience, and technology in growing revenue and audiences on the alternative app stores. No one else can offer this.”
This won’t take us to the moon, but another new game developer has been brought on board. If we assume that 10% of that $2M USD/month Google Play & App Store sales becomes revenue distributed by Flexion, from which 10% EBITDA is generated => annually $24M USD x 10% x 10% = $0.24M USD EBITDA per year. Better than nothing, but hopefully not one of those big deals mentioned earlier…
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Pretty much the same thoughts after this Q3 as in previous posts. Cash has dwindled by over 5 million since the last quarter, with just over 7 million left. Hopefully, we can build up the cash reserves a bit over the next few quarters so we don’t have to start worrying about the need for additional funding 
Once again, over 3 million was paid for some game rights. I wonder which game it is? It looks like they’ll have to keep making payments on those in the future as well. The talk regarding next year remains ambitious, and this Q4 is bound to be strong as well. Big deals are reportedly coming. Now we just wait for them to deliver on those promises 
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Same here—there wasn’t much new compared to the information provided in the profit warning. Q4 will likely be stronger in terms of revenue and EBITDA than a year ago, if the October figures and November development (revenue records being broken week by week) are anything to go by.
I’d certainly like more transparency regarding those game rights. The timing only matches the release of Monopoly Go and Stumble Guys, suggesting some kind of additional fee that might be related to better-than-expected sales on Google Play and the Apple Store 
It’s quite a large investment from the company if it’s related to those games.
In addition, cash has been drained by negative changes in working capital—meaning accounts receivable have increased and “accounts payable” have decreased. Around -3.7m GBP YTD. This should at least partially correct itself in Q4, along with a strong performance for the rest of the year.
But we really need to keep an eye on the cash position if new game launches continue to consume cash upfront in the form of game rights. That could start limiting growth.
Apparently, there are other development initiatives in the pipeline. Hopefully, they don’t start spreading themselves too thin.
“We are participating in several exciting new strategic initiatives
including the integration of third-party payment services in
games, cloud gaming and direct distribution. All of these initiatives
serve to generate more revenue and audiences for the games
and developers with whom we cooperate.”
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A highlight from Redeye’s latest update:
“On this note, we also see existing industry players intensifying their efforts in the space. For instance, Digital Turbine, a US-listed platform company that Flexion Mobile partnered with in March 2023, disclosed its intention to allocate more capital in this space to capture future growth opportunities while referring to its partnership with Flexion in its recent earnings call. Furthermore, in addition to alternative app stores for game distribution, Digital Turbine underscores the significance of direct distribution, a territory that rumors suggest Meta is also exploring. This involves users downloading a game directly through an ad, presenting an additional dimension and complexity that Flexion can take advantage of. As the distribution of games becomes more complex, the value proposition of Flexion’s solutions increases. Once again, this underscores Flexion’s potential for enhanced value and profitability as the gaming distribution landscape evolves in complexity.”
That Digital Turbine partnership was already announced in 3/2023, but at the time I didn’t quite grasp what it was all about. After reading this, it’s starting to look like there could be a major disruption underway in mobile game distribution that doesn’t rely solely on alternative app stores. The text also mentions that Digital Turbine has increased its stake in Aptoide (an alternative Android app store), which suggests that investing in Flexion could also be on their agenda. The company’s market cap is just over $500M, but it is heavily indebted and loss-making, which lowers expectations regarding investments.
Are there still any forum members holding this? I took an opening position myself, as Q1 was quite strong. It’s currently trading practically at its net cash value, and insiders bought in heavily during the autumn. The volumes are indeed very modest, usually just a few thousand kronor a day.
It can work well as a balancing play, but as a business, this has turned out to be surprisingly weak despite a clear value proposition. The added value is evidently small, as developers aren’t rushing to become Flexion’s customers; on the contrary, Flexion is forced to pay large licensing fees upfront on poor terms. Costs do not scale because sales and onboarding apparently require manual labor per game, and the game’s lifecycle is short in terms of cash flow. I can’t find any other explanations for the poor development.
If the founders and management truly believed in the business, they probably would have taken the whole company private by now.
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I believe Flexion has an exceptionally strong short-term price driver: the Expression Direct direct-to-consumer solution launched in May, which the company stated they are currently testing with major publishers. Here is the initial press release from February:
As many know, this model bypasses Google and Apple app stores entirely. For Flexion, this means that as traditional intermediaries are removed from Direct revenue, both the customers’ and Flexion’s profitability improve immediately. If even a fraction of the current player volumes from, for example, EA or King shifts to purchasing from the game studios’ own web stores, Flexion’s earnings could rise significantly.
At this pricing, I find the case to be asymmetrical. The recent Q1 report proved an operational turnaround to break-even. Cash is no longer being burned due to business losses, and a net cash position larger than the market cap provides strong downside protection.
When you factor in the Direct catalyst, a simultaneous correction in earnings and valuation multiples could trigger the famous “twin engine” effect—meaning the share price rises forcefully alongside both multiples and earnings.
Since the daily trading volume on the exchange is often only in the hundreds of euros at the moment, even a small amount of buying pressure could make the price rise very violent once this is reflected in the results.
That direct has been talked about for a few years now and is admittedly interesting. Did you mean to include a different link? That one only talks about the core business, i.e., EA games coming to alternative app stores via Flexion.
Oops, the wrong link was sent indeed. First, the press release about the service launch, and second, the Q1 results.
In my opinion, it all looks quite positive. With Direct, developers have clear incentives to drive traffic away from app stores, and Flexion can negotiate a higher take rate for itself. Players can be lured to developers’ own stores with bonuses that aren’t offered in Google’s or Apple’s app stores. Everyone wins.
Highlights:
- Exprexion Direct: This service enables developers to sell to their players no matter where those players are. By moving transactions outside of the major app stores, studios can make better margins and reclaim the 30% fee typically charged by platform owners. The service uses proven payment technology from trusted suppliers, like Xsolla, to ensure the buying experience remains smooth.
- Working smarter: Our new team structure reduces overhead significantly and speeds up delivery. We are combining marketing and outreach and where possible we use AI to make our workflows even more efficient. Year on year we have reduced headcount by 18%.
- New regulations continue to drive demand for independent stores and payments. We are excited about this and are strategically positioned to capitalize on a wave of new stores as a result of stronger market regulations. In Q1, we launched a few games on the new Epic Mobile Game Store. Our product and marketing partnership with Xsolla also puts us in a great position to meet this new demand through Exprexion Direct. Our updated SDK gives studios easy access to top-tier payment services, a unique integration that includes app stores distribution. Its value is already being validated by several big titles currently testing it out.
- Net profit: GBP 0.03m (- 0.71m), + 105% year-on-year from Q1 2025.
- Operating cash flow: GBP - 0.05m (1.49m)
- The movement in operating cash flow for the quarter is primarily driven by the timing of working capital requirements and one-off costs associated with the ongoing restructuring of the Creators segment.
- Cash position: As of 31 March 2026, cash reserve of GBP 13.9m (14.4m), no debt.
Edit: So, net cash is 16.1 million euros and market cap is 15.3 million euros. This means you don’t have to pay anything for the actual business.